You have a chance to buy a corporate bond. Here are the details: Years until maturity = 10 Annual interest income = $100/year (assume end of the year) Par value paid to you when the bond matures in 10 years = $1,000 Assume the interest is paid yearly. Market rates are currently 12% and coupon rate is 10% What is this bond's value? Group of answer choices $228.91 $ 886.99 $1,132.97 $100.00
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- Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?Give typing answer with explanation and conclusion If a bond is issued at the price of $10,000 per contract and promises a 5.7% interest every year, the contact will be redeemed by the issuer at a discount after 8 years for $9,200. If the market is offering a return of 4.8% for similar risk securities, what would be the price you are ready to offer for this bond? Question 4 options: $10,590 $10,040 $10,290 $9,740Consider a bond with a current value of $928.01. It is a 10-year, $1,000 bond, coupons paid semi-annually, and has a 7% coupon rate. a. The bond's yield to maturity (YTM) is: b. What will be its value (per $1,000 of face) if its YTM changes to 10%? Question content area bottom Part 1 a. The YTM is enter your response here%. (Round to two decimal places.) b. Value (per $1,000 of face): $enter your response here. (Round to the nearest cent.)
- Suppose you want to purchase a bond with a $1,000 par value maturing in 4 years with an 8% annual coupon interest rate, and has a market interest rate of 6%. What's the price or the value of this bond? Select one: O a. $1,069.31 O b. $9712 O c. $1,000 7 O d. 927.66Consider a bond that is currently priced at $1100. If the face value of the bond is $1000, coupon payments are made semiannually, the bond matures in 5 years, and the YTM is 3%, what is the coupon rate? Group of answer choices 5.17% 2.58% 3.00% $25.84What must be the price of a $1,000 bond with a 5.8% coupon rate, annual coupons, and 15 years to maturity if YTM is 10.5% APR? O A. $652.49 OB. $913.49 O C. $521.99 O D. $782.99
- Suppose you purchase a zero coupon bond with face value $1,000, maturing in 25 years, for $180. What is the implicit interest, in dollars, in the first year of the bond's life? O $2.86 O $9.84 O $12.78 O $19.27 O $30.00Start with the partial model in the file Ch04 P24 Build a Model.xlsx onthe textbook’s Web site. A 20-year, 8% semiannual coupon bond with a parvalue of $1,000 may be called in 5 years at a call price of $1,040. The bondsells for $1,100. (Assume that the bond has just been issued.)a. What is the bond’s yield to maturity?Consider the following bond where the coupons are paid annually, Bond CIBC Price $1020.50 YTM 4% Years to maturity 10 years What is the coupon rate of this bond? The face value of the bond is $1,000. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below. Enter your answer rounded to 2 DECIMAL PLACES.
- A bond that matures in 10 years has a $1,000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 13 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? Question content area bottom Part 1 a. The value of this bond if it paid interest annually would be $enter your response here.Give typing answer with explanation and conclusion Consider two Bonds with $1,000 face value: 10-year and 30-year maturity. Both Bonds offer 10% annual coupon, paid once a year. Assume that interest rates, hence YTM (Yield to Maturity) changed from 4% to 5%. How much will be the percentage change in the 30-year Bond price? Enter your answer in the following format: + or - 0.1234 Hint: Answer is between -0.1175 and -0.1465A bond promises to pay you $7,000.00 in 10 years. If you are able to earn 6 percent on securities of equal risks, what would be the present value of the Bond? (to the nearest dollar) Select one: O a. $4,200 O b. $3,589 Oc. $3,727.00 O d. $3,909 A bond will sell at if the required return is greater than the coupon rate.
